CBO report: Stimulus package saved or created as many as 1.6 million jobs
By Michael O'Brien - 12/01/09 10:09 AM ET

The stimulus bill enacted this year has resulted in as many as 1.6 million jobs saved or created this fall, the Congressional Budget Office (CBO) said Monday evening.

The nonpartisan CBO said in a legally mandated report that the American Recovery and Reinvestment Act (ARRA) had resulted in between 600,000 and 1.6 million jobs for the U.S. economy that wouldn't have existed in the absence of the stimulus.

Additionally, the CBO said, gross domestic product (GDP) was as much as 3.2 percent higher than it would have been in the absence of the stimulus.

CBO Director Douglas Elmendorf wrote on his official blog:

Looking at the actual amounts spent so far (where identifiable) and estimates of the other effects of ARRA on spending and revenues, CBO has estimated the law’s impact on employment and economic output using evidence about how previous similar policies have affected the economy and various mathematical models that represent the workings of the economy. On that basis, CBO estimates that in the third quarter of calendar year 2009, an additional 600,000 to 1.6 million people were employed in the United States, and real (inflation-adjusted) gross domestic product (GDP) was 1.2 percent to 3.2 percent higher, than would have been the case in the absence of ARRA.

The White House had claimed in its own estimate of the Recovery Act's impact that the stimulus bill had saved or created roughly 640,000 jobs since going into effect earlier this year.

Republicans had attacked the White House jobs figures as "trying to cover up economic reality by manufacturing job numbers out of thin air" when the Obama administration released those data. Republicans in Congress meanwhile point to testimony earlier this year from a Bureau of Labor Statistics (BLS) official maintaining it's virtually impossible to glean such an estimate of the true impact of the stimulus.

The CBO said that the White House's model for analyzing the stimulus was not comprehensive, and that its own analysis provided the best look at the impact of the stimulus so far.

Update, 1:23 p.m.: Vice President Joe Biden released the following statement about the CBO report:

This new report from the Congressional Budget Office is further evidence of what private forecasters and government economists have been saying: the Recovery Act is already responsible for more than 1 million jobs nationwide. From independent economists to Congress’s own nonpartisan research body, the experts have spoken and the debate is no longer whether the Recovery Act is creating and saving jobs, but how we provide even more opportunities to drive growth and support American workers. This early progress less than halfway through the program is encouraging, but we’re just getting started. In the coming months, we’ll break ground on thousands of infrastructure projects, launch multi-billion dollar broadband and high speed rail initiatives and make critical investments in our nation’s schools and businesses through the Recovery Act that will help put America back to work and lay a foundation for long-term economic growth.

donkhater

12-01-2009, 03:26 PM

So what does that come to? About $100,000 of taxpayer money per job? Great.

Sounds about right for this Micky Mouse Operation.

CoMoChief

12-01-2009, 03:27 PM

BULLLLLLLLLLLSHIT

KC Dan

12-01-2009, 03:55 PM

Given that is true information, then they are negative about 3 million jobs since Jan 2009. Great work!

Donger

12-01-2009, 04:09 PM

So:

$787 billion divided by 1.6 million is $491,875.00 per job?

Yeah, that sounds like a bang up job, gubmint.

redsurfer11

12-01-2009, 04:10 PM

LIES

wild1

12-01-2009, 04:13 PM

So:

$787 billion divided by 1.6 million is $491,875.00 per job?

Yeah, that sounds like a bang up job, gubmint.

Median personal income for an adult full-time worker is $39k. For $787 billion, we could have just paid out how many such salaries? Millions? We probably could have paid off everyone who's unemployed for a year.

Besides, we've all seen how much BS the "saved" numbers are.

Donger

12-01-2009, 04:15 PM

Median personal income for an adult full-time worker is $39k

For $787 billion, we could have just paid out how many such salaries?

~20.2 million

Direckshun, did you really post this thread as an example of a positive?

wild1

12-01-2009, 04:16 PM

~20.2 million

Direckshun, did you really post this thread as an example of a positive?

I was afraid that I didn't do the math correctly.

We could be paying everyone who's unemployed a salary like his cabinet members get for the money we spent to still lose 3 million additional jobs.

Donger

12-01-2009, 04:19 PM

I was afraid that I didn't do the math correctly.

We could be paying everyone who's unemployed a salary like his cabinet members get for the money we spent to still lose 3 million additional jobs.

The scary thing is that I ran the numbers based on Direckshun's best case. Here's the math on the low end estimate:

$1,311,666.00 per job "saved."

That's just comical.

Direckshun

12-01-2009, 04:33 PM

You guys pivoted very quickly from "this bill is an abortion that won't save jobs" to "this bill isn't creating enough jobs to be worth it."

Nicely done. I wonder what your pivot will be tomorrow.

Donger

12-01-2009, 04:35 PM

You guys pivoted very quickly from "this bill is an abortion that won't save jobs" to "this bill isn't creating enough jobs to be worth it."

Nicely done. I wonder what your pivot will be tomorrow.

Who said spending 800 billion wouldn't save jobs? Do you think spending $500K per job is a good thing?

Direckshun

12-01-2009, 04:42 PM

Who said spending 800 billion wouldn't save jobs?

The Republicans who voted against it.

memyselfI

12-01-2009, 04:43 PM

I'm sure all the unemployed people appreciate the CBO's efforts.

Donger

12-01-2009, 04:45 PM

The Republicans who voted against it.

Link?

RNR

12-01-2009, 04:46 PM

Given that is true information, then they are negative about 3 million jobs since Jan 2009. Great work!

Yeah these are the real numbers...stop laughing you can trust them! And only how much per saved job? What a crock of shit and only something a blind follower of King Barry could be proud of :rolleyes:

FishingRod

12-01-2009, 04:57 PM

Not really trying to jump on the this whole idea sucked bandwagon but between 600,000 and 1.6 million is a pretty wide range. What I find maddening is that our honorable reprehensive from both major party's had to have this passed by noon tomorrow ok next Tuesday errrr next Thursday ... ok next week or we are really gonna but headed for a disaster of biblical proportions. So a year later 20-25% ish of this money has been doled out. What the hell was the big hurry? I am almost ready to believe that these guys don't always tell the truth.

HonestChieffan

12-01-2009, 05:06 PM

All based on a model? So its another projection, I like that, and it gives an answer of 600,000 to 1,600,000....God love a range.

jjjayb

12-01-2009, 05:42 PM

Don't tell me about the mythical "jobs saved". Just tell me how many were created. The "jobs saved" statistic is nothing more than a way to fudge the numbers. How can you quantify a "job saved"? We've already seen the fraud committed with that statistic.

BigRedChief

12-01-2009, 05:43 PM

Given that is true information, then they are negative about 3 million jobs since Jan 2009. Great work!No policy or program could have stopped that. Novemeber - January we were losing 700,000 jobs a month.

Chief Henry

12-01-2009, 05:52 PM

All based on a model? So its another projection, I like that, and it gives an answer of 600,000 to 1,600,000....God love a range.

Give or take one million jobs either way....now that is something to hang your hat :rolleyes:

HonestChieffan

12-01-2009, 05:59 PM

Give or take one million jobs either way....now that is something to hang your hat :rolleyes:

Close enough for government work?

Garcia Bronco

12-01-2009, 11:18 PM

Between 600k and 1.6mill? That's quite a range. Way to pin it down!

KC Dan

12-02-2009, 12:02 AM

No policy or program could have stopped that. Novemeber - January we were losing 700,000 jobs a month.Ah yes, the "it would have been worse" argument. Both sides use it and it is wonderful because it is impossible to prove it definately wrong.

Do I think that the stimulus helped to create or save gov't jobs - absolutely!

Did it do anything to save or create private sector jobs that people had in January 2009 - Not of any true consequence.

Prove that wrong and that 600k-1.6 million private sector jobs were saved or created - they can't either. And, at what cost per job were those "created or saved" jobs "created or saved"?

Was it worth it? Could we have just found 600k-1.6 million jobless people and gave them $50k for 8 years or until the economy recovers on its own? Or, is it better to spend $400k per job (a temp job at that)?

KCWolfman

12-02-2009, 12:33 AM

These were all permanent goods creation positions?

Or were a great many of them manufactured temporary positions or even worse some government position that creates no goods whatsoever?

I don't understand why the Republicans were so skeptical of the reports, after all anyone can accidentally create new districts in states that never existed before when reporting the supposed jobs.

KCWolfman

12-02-2009, 12:35 AM

You guys pivoted very quickly from "this bill is an abortion that won't save jobs" to "this bill isn't creating enough jobs to be worth it."

Does that include the made up COngressional Districts....Or the School in Chicago where the Obama Adm bragged on saving over 400 teachers jobs, when at its highest the School only had 200+ teachers.....Hmmmmm

donkhater

12-02-2009, 07:29 AM

You guys pivoted very quickly from "this bill is an abortion that won't save jobs" to "this bill isn't creating enough jobs to be worth it."

Nicely done. I wonder what your pivot will be tomorrow.

This bill didn't save as many jobs that would have been saved if taxes were cut by the same amount as the stimulus bill.

The deficit would've grown by the same amount, but the economy would've been givien an actual real boost of capital.

The stimulus can provide a jolt of spending, but that jolt is as short-lived as a caffeine high and at the end of the day you're left with a headache.

It's much better if the economy took it's time to let the prices settle and the bubbles to burst all the way. To play off the earlier analogy, sleep in a bit so the caffiene isn't needed and you won't feel so crappy later.

donkhater

12-02-2009, 07:32 AM

You guys pivoted very quickly from "this bill is an abortion that won't save jobs" to "this bill isn't creating enough jobs to be worth it."

Nicely done. I wonder what your pivot will be tomorrow.

We're just throwing you a bone, Direckshun. Since you refuse to believe that the stimulus bill was nothing but a bunch of pork, we'll accept your claim that it actually did anything (even though the stats to back it up are dubious at best).

So even if what you say is true, it was an incredibly inefficient way to 'jumpstart' the economy. You have yet to show it was worth the paper the bill was written on.

BigRedChief

12-02-2009, 08:04 AM

Ah yes, the "it would have been worse" argument. Both sides use it and it is wonderful because it is impossible to prove it definately wrong.

Do I think that the stimulus helped to create or save gov't jobs - absolutely!

Did it do anything to save or create private sector jobs that people had in January 2009 - Not of any true consequence.

Prove that wrong and that 600k-1.6 million private sector jobs were saved or created - they can't either. And, at what cost per job were those "created or saved" jobs "created or saved"?

Was it worth it? Could we have just found 600k-1.6 million jobless people and gave them $50k for 8 years or until the economy recovers on its own? Or, is it better to spend $400k per job (a temp job at that)?
Myself, if I was in charge would have given tax breaks to business's who hire new workers. Let the private sector inovate and take risk but also the government will help allievate a little of that risk.

Now, don't confuse my support of this idea with support of a general tax break for business's. That borders on corporate welfare. Create a job, get some taxpayer money. Simple.

wild1

12-02-2009, 08:07 AM

The scary thing is that I ran the numbers based on Direckshun's best case. Here's the math on the low end estimate:

$1,311,666.00 per job "saved."

That's just comical.

Well, who cares, we just print that money anyway. It's all free.

ROYC75

12-02-2009, 11:10 AM

Liberal math makes no sense.

BigChiefFan

12-02-2009, 11:18 AM

Wow. We've been hijacked and hoodwinked. What a scam they've got going. Did I mention the interest we'll have to pay back on our tax money that we've already given? Abolish the Fed now.

Chief Henry

12-02-2009, 11:18 AM

Liberal math makes no sense.

Just wait until we see the Liberal calander :rolleyes: We'll see how long 18 month's equates too. Hell, $600,000 is close to $1,600,000 !!!

ROYC75

12-02-2009, 12:01 PM

Just wait until we see the Liberal calander :rolleyes: We'll see how long 18 month's equates too. Hell, $600,000 is close to $1,600,000 !!!

Ah, but Liberal math does make cents, err, dollars, uh, no cents, what is the value of a dollar now ? How many cents ?

RINGLEADER

12-02-2009, 03:31 PM

So what does that come to? About $100,000 of taxpayer money per job? Great.

Sounds about right for this Micky Mouse Operation.

At least.

The real problem that Obama and Dems don't seem to get is that creating a government job has no exponential effect on the job market or the economy. Incentivizing small business (or any private sector) through tax policy is the only meaningful tool the government has to start that ball rolling and unfortunately the Dems at all levels of power right now are pretty much opposed to such an application. They use tax policy for punitive measures to change behavior. They see no benefits in incentivizing individuals and companies to create things and build businesses that could transform whatever tax breaks are awarded into more than the single job that the same investment in the government sector might create for a short period of time (and then need to be re-funded with ANOTHER stimulus to continue the same short-term government job down the road).

Maybe if Obama had some people around him who actually got this very novel concept he would entertain the thought. Instead they seem to have no faith in the ingenuity or determination of the individual and point to the possibility of failure in the private sector when, in actuality, spending to create faux government jobs leads to only one destination -- the end of that job when the funding for it runs out. For the vast, vast majority of public-sector employment there simply is no such things as a self-sustaining government job, much less a self-replicating one.

wild1

12-02-2009, 03:59 PM

At least.

The real problem that Obama and Dems don't seem to get is that creating a government job has no exponential effect on the job market or the economy. Incentivizing small business (or any private sector) through tax policy is the only meaningful tool the government has to start that ball rolling and unfortunately the Dems at all levels of power right now are pretty much opposed to such an application. They use tax policy for punitive measures to change behavior. They see no benefits in incentivizing individuals and companies to create things and build businesses that could transform whatever tax breaks are awarded into more than the single job that the same investment in the government sector might create for a short period of time (and then need to be re-funded with ANOTHER stimulus to continue the same short-term government job down the road).

Maybe if Obama had some people around him who actually got this very novel concept he would entertain the thought. Instead they seem to have no faith in the ingenuity or determination of the individual and point to the possibility of failure in the private sector when, in actuality, spending to create faux government jobs leads to only one destination -- the end of that job when the funding for it runs out. For the vast, vast majority of public-sector employment there simply is no such things as a self-sustaining government job, much less a self-replicating one.

:clap:

Direckshun

12-02-2009, 05:25 PM

So:

$787 billion divided by 1.6 million is $491,875.00 per job?

Yeah, that sounds like a bang up job, gubmint.

Actually, we haven't even handed out a shade less than 20% of the stimulus money yet, so your figures need adjusting.

It actually comes out to less than $100,000 per job so far, and this bill wasn't meant just to create/save jobs, but to build infrastructure and invest in R&D that will help push a few industries that will indirectly save/create future jobs.

So I do not think saying $###,### per job is a fair estimation of how the stimulus is working, since that is simply not all it's trying to do.

But even if we were going to use that estimation, at least try to do your math right.

Direckshun

12-02-2009, 05:28 PM

Median personal income for an adult full-time worker is $39k. For $787 billion, we could have just paid out how many such salaries?

We could be paying everyone who's unemployed a salary like his cabinet members get for the money we spent to still lose 3 million additional jobs.

Paying their salaries? To be doing what?

The demand for their job isn't there, that's why they lost their job to begin with.

You've got to do more than band-aid the situation. Make sure the patches you're applying do something.

Direckshun

12-02-2009, 05:30 PM

I'm sure all the unemployed people appreciate the CBO's efforts.

WTF? We're trying to help. Not employ every living person.

We would if we could but pretty much no nation in the history of mankind has been able to accomplish that...

Direckshun

12-02-2009, 05:32 PM

Not really trying to jump on the this whole idea sucked bandwagon but between 600,000 and 1.6 million is a pretty wide range.

It gives an answer of 600,000 to 1,600,000....God love a range.

Between 600k and 1.6mill? That's quite a range. Way to pin it down!

It's a very wide range, but it's evidence that the stimulus is providing the help the economy can use in its recovery.

To quote Krugman, it's made our economy less-bad.

KCWolfman

12-02-2009, 05:34 PM

WTF? We're trying to help. Not employ every living person.

We would if we could but pretty much no nation in the history of mankind has been able to accomplish that...
"We're" trying to help?

When were you elected?

Oh and you and the rest of your elected brethen need to tell Nancy you haven't spent all our money since she is proposing another stimulus already.
Posted via Mobile Device

Direckshun

12-02-2009, 05:38 PM

Do I think that the stimulus helped to create or save gov't jobs - absolutely!

Did it do anything to save or create private sector jobs that people had in January 2009 - Not of any true consequence.

Prove that wrong and that 600k-1.6 million private sector jobs were saved or created - they can't either. And, at what cost per job were those "created or saved" jobs "created or saved"?

Was it worth it? Could we have just found 600k-1.6 million jobless people and gave them $50k for 8 years or until the economy recovers on its own? Or, is it better to spend $400k per job (a temp job at that)?

It can't create private sector jobs out of thin air, I don't think. The government can't directly create demand simply by paying people to stay employed. That money we spend needs to do something.

The government can invest in certain industries that will create some demand in certain areas, but the government simply cannot replace all the private sector jobs lost, that's largely going to be up to the market. The government must help the economy recover and as the market improves, the private sector will be indirectly affected and we might see jobs pick up at that point.

Most of the jobs created by the stimulus package will be indirectly, not directly. Obama's pie-in-the-sky promise was to create 5 million new jobs, and that's just directly create (sounds like he's on pace to do just that, by the way, which is hard to believe).

But 5 million is nothing when we're losing that every six to eight months. Those jobs will be indirectly created or saved by an improving market, with hopefully some help from the stimulus package.

Direckshun

12-02-2009, 05:39 PM

"We're" trying to help?

When were you elected?

Oh and you and the rest of your elected brethen need to tell Nancy you haven't spent all our money since she is proposing another stimulus already.

I wasn't elected. Much like you don't play for the Chiefs when you say "we'll get them next time."

Direckshun

12-02-2009, 05:41 PM

These were all permanent goods creation positions?

Or were a great many of them manufactured temporary positions or even worse some government position that creates no goods whatsoever?

I don't understand why the Republicans were so skeptical of the reports, after all anyone can accidentally create new districts in states that never existed before when reporting the supposed jobs.

500,000 per job is worth it to you?

YOu don't pay taxes do you?

I don't think it is 500,000 per job, since we've only spent about 20% of the funds.

Of course some (if not many) of them are temporary positions -- but that's not necessarily a bad thing. A temporary war in the 40's created the demand we needed for the market to get much better. Once it did and the temporary war went away, we didn't suffer a second jobs depression, because the economy had the demand for jobs to support it all.

Not complaining, because I love it. But let's not pretend Direckshun thinks he has the upper hand in any of these conversations.

Direckshun

12-02-2009, 05:49 PM

This bill didn't save as many jobs that would have been saved if taxes were cut by the same amount as the stimulus bill.

I disagree, and I'll be starting a thread soon making my argument.

We've seen the best multiplier data from the government directly injecting money into industries, and the worst multiplier data from tax cuts in the stimulus package.

Direckshun

12-02-2009, 05:51 PM

So even if what you say is true, it was an incredibly inefficient way to 'jumpstart' the economy. You have yet to show it was worth the paper the bill was written on.

What would you need to see for yourself to determine that it was worth it?

Asking honestly, so that I may deliver.

wild1

12-02-2009, 05:55 PM

"Why, jobs are a bargain at any price! Even at a million bucks each, and -3,000,000 jobs later!"

Direckshun

12-02-2009, 05:59 PM

The real problem that Obama and Dems don't seem to get is that creating a government job has no exponential effect on the job market or the economy. Incentivizing small business (or any private sector) through tax policy is the only meaningful tool the government has to start that ball rolling and unfortunately the Dems at all levels of power right now are pretty much opposed to such an application. They use tax policy for punitive measures to change behavior. They see no benefits in incentivizing individuals and companies to create things and build businesses that could transform whatever tax breaks are awarded into more than the single job that the same investment in the government sector might create for a short period of time (and then need to be re-funded with ANOTHER stimulus to continue the same short-term government job down the road).

Maybe if Obama had some people around him who actually got this very novel concept he would entertain the thought. Instead they seem to have no faith in the ingenuity or determination of the individual and point to the possibility of failure in the private sector when, in actuality, spending to create faux government jobs leads to only one destination -- the end of that job when the funding for it runs out. For the vast, vast majority of public-sector employment there simply is no such things as a self-sustaining government job, much less a self-replicating one.

I tried to comprehensively reply to this critique, but I had a lot of trouble making sense of all of it.

Especially when, as I bolded above, you say "we should use tax policy to change behavior" and then one sentence later condemn Obama for using tax policy to change behavior.

There's not a lot here other than nonsensical statements. The administration doesn't want to invest in individuals to "create things"? Short term government jobs will only create a second unemployed depression down the road unless the government extends them?

Bueller? Bueller?

Direckshun

12-02-2009, 06:02 PM

"Why, jobs are a bargain at any price! Even at a million bucks each, and -3,000,000 jobs later!"

You do understand you're oversimplifying what the stimulus package was intended to do when you're simply saying it's value can be equated by saying "how much does each job cost."

That was just one of many things the stimulus package wants to do. It also wants in invest in healthcare, invest in R&D, and lay down some structural reform so that future job markets can hypothetically thrive.

I'm not saying it's all going to work, but let's at least try to understand what our own Congress is doing since we're all participating in a political forum.

Donger

12-02-2009, 06:04 PM

Actually, we haven't even handed out a shade less than 20% of the stimulus money yet, so your figures need adjusting.

It actually comes out to less than $100,000 per job so far, and this bill wasn't meant just to create/save jobs, but to build infrastructure and invest in R&D that will help push a few industries that will indirectly save/create future jobs.

So I do not think saying $###,### per job is a fair estimation of how the stimulus is working, since that is simply not all it's trying to do.

But even if we were going to use that estimation, at least try to do your math right.

Fair enough. So, $120K at the high end and $316K at the low end? That's still a success in your opinion?

And, doesn't the fact that the range in job creation give you pause?

Direckshun

12-02-2009, 06:12 PM

Fair enough. So, $120K at the high end and $316K at the low end? That's still a success in your opinion?

And, doesn't the fact that the range in job creation give you pause?

Sure it does, but that just tells me the CBO used a wide variety of calculations and isn't pretending to know more than it does -- which tells me, of course, that it is almost certain stimulus package is starting to be a part of the solution more than it is a part of the problem.

I am on record in this forum saying that I disliked how ineffective the stimulus package was right out of the gate. The immediate-term results were awful, but the short-term results are starting to look almost exactly as I had envisioned when I supporting the measure.

But the truth is, I cannot call this thing a success until most or all of the money is doled out, and until it helps the economy recover as a result.

At this point, it is on pace (assuming the pace holds) to create 3,000,000 to 8,000,000 jobs, when Obama's pie-in-the-sky goal was 5,000,000, which I thought was unrealstic. If that's what happens, as well as a steadily improving economy with improved infrastructure across the board, I'd have to say it's a success. Wouldn't you?

Donger

12-02-2009, 06:59 PM

Sure it does, but that just tells me the CBO used a wide variety of calculations and isn't pretending to know more than it does -- which tells me, of course, that it is almost certain stimulus package is starting to be a part of the solution more than it is a part of the problem.

I am on record in this forum saying that I disliked how ineffective the stimulus package was right out of the gate. The immediate-term results were awful, but the short-term results are starting to look almost exactly as I had envisioned when I supporting the measure.

But the truth is, I cannot call this thing a success until most or all of the money is doled out, and until it helps the economy recover as a result.

At this point, it is on pace (assuming the pace holds) to create 3,000,000 to 8,000,000 jobs, when Obama's pie-in-the-sky goal was 5,000,000, which I thought was unrealstic. If that's what happens, as well as a steadily improving economy with improved infrastructure across the board, I'd have to say it's a success. Wouldn't you?

No, I wouldn't. Adding to the national debt is never a success.

RINGLEADER

12-03-2009, 09:32 AM

Actually, we haven't even handed out a shade less than 20% of the stimulus money yet, so your figures need adjusting.

It actually comes out to less than $100,000 per job so far, and this bill wasn't meant just to create/save jobs, but to build infrastructure and invest in R&D that will help push a few industries that will indirectly save/create future jobs.

So I do not think saying $###,### per job is a fair estimation of how the stimulus is working, since that is simply not all it's trying to do.

But even if we were going to use that estimation, at least try to do your math right.

Trying to justify the government spending money on jobs that wouldn't otherwise exist is sad. You seem to skip past the fact that once the money for that job runs out the person is going to face unemployment again -- unless we underwrite their job again...and again...and again.

RINGLEADER

12-03-2009, 09:34 AM

It's a very wide range, but it's evidence that the stimulus is providing the help the economy can use in its recovery.

To quote Krugman, it's made our economy less-bad.

That's speculation. He doesn't know that. No one knows that. That's what makes the whole jobs saved or created benchmark meaningless. Obama and the Dems need to show that it's done something because they know the normal metrics used to measure such things were (and continue to) nothing but bad news with or without the "stimulus".

KC native

12-03-2009, 09:36 AM

No, I wouldn't. Adding to the national debt is never a success.

Wow, so you would say any president hasn't been successful for the last 30 years then huh?

KC native

12-03-2009, 09:37 AM

I haven't read the report and probably won't because it's useless. I'd much rather stay in the realm of the standard data releases where we know what is measured and what the drawbacks are.

RINGLEADER

12-03-2009, 09:37 AM

It can't create private sector jobs out of thin air, I don't think. The government can't directly create demand simply by paying people to stay employed. That money we spend needs to do something.

The government can invest in certain industries that will create some demand in certain areas, but the government simply cannot replace all the private sector jobs lost, that's largely going to be up to the market. The government must help the economy recover and as the market improves, the private sector will be indirectly affected and we might see jobs pick up at that point.

Most of the jobs created by the stimulus package will be indirectly, not directly. Obama's pie-in-the-sky promise was to create 5 million new jobs, and that's just directly create (sounds like he's on pace to do just that, by the way, which is hard to believe).

But 5 million is nothing when we're losing that every six to eight months. Those jobs will be indirectly created or saved by an improving market, with hopefully some help from the stimulus package.

Just about everything you say after the first paragraph here is wrong. There is absolutely no proof that the stimulus created job growth "indirectly". Quite the contrary.

RINGLEADER

12-03-2009, 09:41 AM

I tried to comprehensively reply to this critique, but I had a lot of trouble making sense of all of it.

Especially when, as I bolded above, you say "we should use tax policy to change behavior" and then one sentence later condemn Obama for using tax policy to change behavior.

There's not a lot here other than nonsensical statements. The administration doesn't want to invest in individuals to "create things"? Short term government jobs will only create a second unemployed depression down the road unless the government extends them?

Bueller? Bueller?

If you can't differentiate between the application of tax policy that incentivizes growth and encourages the inflow of private capital into the private sector and tax policy that punitively attacks certain behavior that the Obama/Dem government doesn't agree with then I'm not sure what to tell you.

It's not that difficult of a concept to grasp.

Donger

12-03-2009, 02:40 PM

Wow, so you would say any president hasn't been successful for the last 30 years then huh?

Not successful in exercising fiscal restraint, no.

Direckshun

12-03-2009, 05:45 PM

No, I wouldn't. Adding to the national debt is never a success.

The mere creation of debt isn't a dealbreaker. That's like saying buying a house is never a success, because you're creating more debt for you and your family.

If we add to the debt by improving the economy so that we can pay the debt back off, I'd say that's a success.

Direckshun

12-03-2009, 05:46 PM

Trying to justify the government spending money on jobs that wouldn't otherwise exist is sad. You seem to skip past the fact that once the money for that job runs out the person is going to face unemployment again -- unless we underwrite their job again...and again...and again.

Nope.

That's not what happened after WWII, a temporary war that created a shitload of temporary jobs. Once the war ended, we didn't see a wave of unemployment because the "temporary jobs" created during WWII actually allowed the economy to recover and job openings awaited the workers when their temporary gigs expired.

Direckshun

12-03-2009, 05:47 PM

That's speculation. He doesn't know that. No one knows that. That's what makes the whole jobs saved or created benchmark meaningless. Obama and the Dems need to show that it's done something because they know the normal metrics used to measure such things were (and continue to) nothing but bad news with or without the "stimulus".

If we can't know there's good news, how can we know there's bad news?

RNR

12-03-2009, 05:47 PM

The mere creation of debt isn't a dealbreaker. That's like saying buying a house is never a success, because you're creating more debt for you and your family.

If we add to the debt by improving the economy so that we can pay the debt back off, I'd say that's a success.

LMAO wow just wow!

Direckshun

12-03-2009, 05:48 PM

Just about everything you say after the first paragraph here is wrong. There is absolutely no proof that the stimulus created job growth "indirectly".

I never claimed there was. There is evidence, however, which is distinct from proof.

There is no proof on this either way.

Direckshun

12-03-2009, 05:49 PM

If you can't differentiate between the application of tax policy that incentivizes growth and encourages the inflow of private capital into the private sector and tax policy that punitively attacks certain behavior that the Obama/Dem government doesn't agree with then I'm not sure what to tell you.

It's not that difficult of a concept to grasp.

I would imagine determining if tax policy is "punitively attacking behavior" or "incentivizing growth" would be a glass is half-full/half-empty type deal.

Donger

12-03-2009, 05:56 PM

The mere creation of debt isn't a dealbreaker. That's like saying buying a house is never a success, because you're creating more debt for you and your family.

If we add to the debt by improving the economy so that we can pay the debt back off, I'd say that's a success.

Sure. Get back to me when congress actually passes a budget that spends less than it takes from us taxes.

Calcountry

12-03-2009, 06:05 PM

You guys pivoted very quickly from "this bill is an abortion that won't save jobs" to "this bill isn't creating enough jobs to be worth it."

Nicely done. I wonder what your pivot will be tomorrow.Pivot??? WTF, your guy is in total free fall and you are on the Bus. You might want to kick open that emergency door and gtf out before it crashes dude.

Let's see, we won't go above 8 % unemployment, CHECK

We will get health care done before August, CHECK

We must pass comprehensive climate change legislation(HOAX and trade), CHECK

And now, the grand finale, CHANGE, as in CHANGING the Bush war doctrine, get it, got it, good, no change here, CHECK.

Please tell me, just WTF did you vote for again? Why exactly did you vote for this tool? Oh yeah yeah, I must start putting his name in here like this{O*ama}<O*AMA><O*AMA> now. The way Jettio did. lmfao!

patteeu

12-03-2009, 07:23 PM

Myself, if I was in charge would have given tax breaks to business's who hire new workers. Let the private sector inovate and take risk but also the government will help allievate a little of that risk.

Now, don't confuse my support of this idea with support of a general tax break for business's. That borders on corporate welfare. Create a job, get some taxpayer money. Simple.

Yeah, we sure wouldn't want American business to gain the kind of competitive advantage in the global economy that a general tax reduction would provide. /sarcasm

You get half credit for at least having a better idea than porkulous for stimulating job creation, though.

KCWolfman

12-03-2009, 07:29 PM

Someone help me out. Direkshun says the govt still has 80% of the stimulus funds to deliver but Nancy Pelosi is stating another stimulus is needed.

I am not following the logic at all.
Posted via Mobile Device

patteeu

12-03-2009, 07:31 PM

Actually, we haven't even handed out a shade less than 20% of the stimulus money yet, so your figures need adjusting.

It actually comes out to less than $100,000 per job so far, and this bill wasn't meant just to create/save jobs, but to build infrastructure and invest in R&D that will help push a few industries that will indirectly save/create future jobs.

So I do not think saying $###,### per job is a fair estimation of how the stimulus is working, since that is simply not all it's trying to do.

But even if we were going to use that estimation, at least try to do your math right.

Actually, that's up to $100,000 per job per quarter, depending on when the funds were spent (or the equivalent of $400,000 per job on an annual basis).

patteeu

12-03-2009, 07:40 PM

Sure it does, but that just tells me the CBO used a wide variety of calculations and isn't pretending to know more than it does -- which tells me, of course, that it is almost certain stimulus package is starting to be a part of the solution more than it is a part of the problem.

I am on record in this forum saying that I disliked how ineffective the stimulus package was right out of the gate. The immediate-term results were awful, but the short-term results are starting to look almost exactly as I had envisioned when I supporting the measure.

But the truth is, I cannot call this thing a success until most or all of the money is doled out, and until it helps the economy recover as a result.

At this point, it is on pace (assuming the pace holds) to create 3,000,000 to 8,000,000 jobs, when Obama's pie-in-the-sky goal was 5,000,000, which I thought was unrealstic. If that's what happens, as well as a steadily improving economy with improved infrastructure across the board, I'd have to say it's a success. Wouldn't you?

How long does a job have to last to count as a job? If the stimulus money "creates or saves" 600k to 1.6 mil new 3 month jobs next quarter as the current "created or saved" jobs disappear (let's assume this happens for the sake of my question) will it count as 1.2 mil to 3.2 mil total jobs or will it count as something less than that (e.g. 300k to 800k yearlong job equivalents) for you?

wild1

12-04-2009, 12:30 AM

so is direckshun the last man standing in the Obama camp on this message board?

BigRedChief

12-04-2009, 07:34 AM

so is direckshun the last man standing in the Obama camp on this message board?I'm still there. Just because I disagree with his approach on some major issues and feel he is underperforming doesn't mean that I see anyone out there that can do a better job. It's a tough job when you have 2 wars, deepest recession since the depression, an economy that almost went over a cliff etc...McCain couldn't have done any better.

wild1

12-04-2009, 08:27 AM

I'm still there. Just because I disagree with his approach on some major issues and feel he is underperforming doesn't mean that I see anyone out there that can do a better job. It's a tough job when you have 2 wars, deepest recession since the depression, an economy that almost went over a cliff etc...McCain couldn't have done any better.

On the contrary, he'd at least be trying to win the two wars, and he'd at least be trying to create jobs, rather than create government. He may not have gotten results, but the unknown is preferable to the lemon we've gotten.

Direckshun

12-04-2009, 12:07 PM

Sure. Get back to me when congress actually passes a budget that spends less than it takes from us taxes.

The last time that happened was actually under a liberal administration.

Believe it or not, in recent history, liberals have the better track record.

Direckshun

12-04-2009, 12:09 PM

Pivot??? WTF, your guy is in total free fall and you are on the Bus. You might want to kick open that emergency door and gtf out before it crashes dude.

Let's see, we won't go above 8 % unemployment, CHECK

We will get health care done before August, CHECK

We must pass comprehensive climate change legislation(HOAX and trade), CHECK

And now, the grand finale, CHANGE, as in CHANGING the Bush war doctrine, get it, got it, good, no change here, CHECK.

Please tell me, just WTF did you vote for again? Why exactly did you vote for this tool? Oh yeah yeah, I must start putting his name in here like this{O*ama}<O*AMA><O*AMA> now. The way Jettio did. lmfao!

You are off the rails, my friend.

KC Dan

12-04-2009, 12:10 PM

The last time that happened was actually under a liberal administration.

Believe it or not, in recent history, liberals have the better track record.I'm sorry, who was in control of Congress then? Who controls the country's purse strings? Yes, it is Congress and they were in Conservative hands then.

Direckshun

12-04-2009, 12:10 PM

Someone help me out. Direkshun says the govt still has 80% of the stimulus funds to deliver but Nancy Pelosi is stating another stimulus is needed.

I am not following the logic at all.

I'm already on record saying that I would not support a second stimulus until we can see the results somewhere after we've handed out 50-75% of this stimulus' funds.

Direckshun

12-04-2009, 12:11 PM

I'm sorry, who was in control of Congress then? Who controls the country's purse strings? Yes, it is Congress and they were in Conservative hands then.

Alright, so you'd equally blame Republicans for exploding the deficit in the meantime.

jjjayb

12-04-2009, 12:12 PM

The last time that happened was actually under a liberal administration.

Believe it or not, in recent history, liberals have the better track record.

Wasn't that when the media was calling it the "Republican caused government shutdown"? You think Congress had nothing to do with that budget?

Direckshun

12-04-2009, 12:13 PM

so is direckshun the last man standing in the Obama camp on this message board?

That's the way it goes.

This place was hurting for conservative voices during the final months of Obama/McCain campaign. Any time a conservative poster threw his two cents in, he was immediately overwhelmed with liberal dissent. Much like I am with conservative dissent any time I post.

That's just the way it goes. Ebbs, flows, etc.

KC Dan

12-04-2009, 12:13 PM

Alright, so you'd equally blame Republicans for exploding the deficit in the meantime.No, I would blame them more! They constantly preach constraint and fiscal responsibility and then went on a shopping spree from 2000-2006.

Direckshun

12-04-2009, 12:13 PM

Wasn't that when the media was calling it the "Republican caused government shutdown"? You think Congress had nothing to do with that budget?

Alright, so you'd equally blame Republicans for exploding the deficit in the meantime.

Direckshun

12-04-2009, 12:14 PM

No, I would blame them more! They constantly preach constraint and fiscal responsibility and then went on a shopping spree from 2000-2006.

That's fair. So I guess we are to assume they've learned their lesson by now.

Donger

12-04-2009, 12:14 PM

The last time that happened was actually under a liberal administration.

Believe it or not, in recent history, liberals have the better track record.

Who controlled congress at that time?

KC Dan

12-04-2009, 12:15 PM

That's fair. So I guess we are to assume they've learned their lesson by now.Yeah, right and I have bridge to sell you. They are all crooks and should all be thrown out, every stinking one of them. Start over with new ones and try again.

Calcountry

12-04-2009, 12:15 PM

You are off the rails, my friend.All aboard! Ha ha ha ha ha ha haaaa!

Ay, Ay, Ay, Ay, Ay, Ay, Ay

Crazy, but that's how it goes
Millions of people living as foes
Maybe it's not too late
To learn how to love
And forget how to hate

Mental wounds not healing
Life's a bitter shame
I'm going off the rails on a crazy train
I'm going off the rails on a crazy train

Let's Go!

I've listened to preachers
I've listened to fools
I've watched all the dropouts
Who make their own rules
One person conditioned to rule and control
The media sells it and you live the role

Mental wounds still screaming
Driving me insane
I'm going off the rails on a crazy train
I'm going off the rails on a crazy train

I know that things are going wrong for me
You gotta listen to my words
Yeah

Heirs of a cold war
That's what we've become
Inheriting troubles I'm mentally numb
Crazy, I just cannot bear
I'm living with something' that just isn't fair

Mental wounds not healing
Who and what's to blame
I'm going off the rails on a crazy train
I'm going off the rails on a crazy train

Direckshun

12-04-2009, 12:16 PM

Who controlled congress at that time?

Alright, so you'd equally blame Republicans for exploding the deficit in the meantime.

KC Dan

12-04-2009, 12:18 PM

Our congress and politicians...

Honest Men by ELO

We're just a stone's throw
From Burning Hellfire
Does anybody know,
Where did all the heroes go?
We've had our fill of
This gallery of scoundrels,
The leaders of the world,
Those power hungry liars

Rise up and sound the sirens,
Send out the searching powers,
All we need is a few good men
Send the S.O.S. and red alerts
All across the universe
Calling your honest men?
S.O.S. emergency,
Sinking fast and getting worse.

Where's your honest men?
In some village, far away,
Or in a little town pub.
High on a mountain top
There must be an honest man
Calling all honest men

Throw out the tyrants,
The aged fat cats
Outlived their usefulness
They have led us to this mess
Make them answer,
Hold them to their promises,
And throw them in the street
If they won't tell the truth

S.O.S. and red alert
All across the universe,
Calling all honest men
S.O.S. emergency,
Sinking fast and getting worse,
Where's your honest men?
To your stations,
Man the ramparts,
The barricades
We need new heroes urgently

We need a few good honest men
Calling all honest men
Calling all honest men
Call to him
He lives next door,
Across the street
On the upper floor.

It's our only hope we need him now
Send the S.O.S. and red alert,
All across the universe,
Calling all honest men
S.O.S. emergency,
Sinking fast and getting worse,
Where's your honest men
Strike a blow,
Save the ship,
We need a few good honest men
Calling all honest men
Calling all honest men
Calling all honest men
S.O.S. across the universe
Where's your honest
We need your honest
Calling all honest men

Calling out all over the world,
Where's your honest men
Looking out all over the world,
We need your honest men

Donger

12-04-2009, 12:18 PM

Alright, so you'd equally blame Republicans for exploding the deficit in the meantime.

Yes, although I believe the spending the GOP is responsible for was due to war.

jjjayb

12-04-2009, 12:20 PM

Alright, so you'd equally blame Republicans for exploding the deficit in the meantime.

But I think Obama is on another level altogether. He is a socialist. He is surrounded by socialists. I truly believe he sees this recession as an opportunity to capitalize on his anti-capitalist beliefs. Pun intended. He needs to go. This is coming from someone who voted for Clinton.

Direckshun

12-04-2009, 12:21 PM

Yes, although I believe the spending the GOP is responsible for was due to war.

Deficit spending for the war.

To say nothing of curbing costs of entitlement programs -- actually expanding the costs of entitlement programs, and doing absolutely zilch to decrease inefficiency or the size of the bureaucracy. And allowing a housing bubble to bring us to the edge of a second Great Depression, which destroyed our economy.

I'm just saying, they don't have the best track record right now.

stevieray

12-04-2009, 12:23 PM

this isn't about party..it's generational..you have a bunch of boomers with the mentality of morally bankrupt teenagers running things.

jjjayb

12-04-2009, 12:25 PM

Deficit spending for the war.

To say nothing of curbing costs of entitlement programs -- actually expanding the costs of entitlement programs, and doing absolutely zilch to decrease inefficiency or the size of the bureaucracy. And allowing a housing bubble to bring us to the edge of a second Great Depression, which destroyed our economy.
I'm just saying, they don't have the best track record right now.

Republicans brought on this housing bubble? You mean the same ones that had been warning about this for years? The same ones that tried to stop this but were stonewalled by the likes of Bawney Fwanks?

Direckshun

12-04-2009, 12:27 PM

Republicans brought on this housing bubble? You mean the same ones that had been warning about this for years? The same ones that tried to stop this but were stonewalled by the likes of Bawney Fwanks?

I'm saying they allowed this housing bubble. They had time to address it and it was never addressed.

Republicans bitched about rising entitlement costs and didn't do shit about that, either.

stevieray

12-04-2009, 12:27 PM

Republicans brought on this housing bubble? You mean the same ones that had been warning about this for years? The same ones that tried to stop this but were stonewalled by the likes of Bawney Fwanks?

..this must be the bubble where clinton forced banks to make the loans.

stevieray

12-04-2009, 12:28 PM

I'm saying they allowed this housing bubble. They had time to address it and it was never addressed.

BS

jjjayb

12-04-2009, 12:33 PM

I'm saying they allowed this housing bubble. They had time to address it and it was never addressed.

Republicans bitched about rising entitlement costs and didn't do shit about that, either.

Isn't this the same Idiot who ran around blaming the housing bubble on Republicans?

Exactly how much power did he have in 2005 to stop Republicans from preventing the housing bubble from expanding?

Hm? What major pieces of Republican legislation did he stop dead in its tracks?

Or is Barney Frank the most powerful congressperson ever?

C'mon, man. You just admitted the truth, that the Republican Party should be held responsible for its complete lack of fiscal discipline. Now you're trying to pin the housing bubble on Barney Frank.

KC native

12-04-2009, 12:37 PM

Republicans brought on this housing bubble? You mean the same ones that had been warning about this for years? The same ones that tried to stop this but were stonewalled by the likes of Bawney Fwanks?

ROFL Please find a republican that was warning about this for the right reasons.

Direckshun

12-04-2009, 12:37 PM

BS

Show me one major piece of Republican legislation that was passed that was intended to fight the housing bubble, and we'll talk.

KC native

12-04-2009, 12:38 PM

Show me one major piece of Republican legislation that was passed that was intended to fight the housing bubble, and we'll talk.

Stevie still believes in the CRA myth

Direckshun

12-04-2009, 12:40 PM

Stevie still believes in the CRA myth

Hey, even if Democrats get the blame for creating the CRA, so be it.

But Republicans had this bubble ready to burst under their noses and nothing happened.

Just like healthcare. Medicare. Social security. Two deficit-financed wars.

Fiscal responsibility within the Republican Party is a laughing matter. Their lectures mean nothing to me for the next four years.

KC native

12-04-2009, 12:43 PM

Hey, even if Democrats get the blame for creating the CRA, so be it.

But Republicans had this bubble ready to burst under their noses and nothing happened.

Just like healthcare. Medicare. Social security. Two deficit-financed wars.

Fiscal responsibility within the Republican Party is a laughing matter. Their lectures mean nothing to me for the next four years.

The problem is CRA had nothing to do with the housing bubble. It's just a way for Republicans to deflect blame from the fact that all of Bush's regulatory appointments failed to do their jobs.

Donger

12-04-2009, 12:44 PM

I wouldn't argue that the CRA was entirely responsible for the housing crisis, but I can't imagine anyone stating that it had nothing to do with it. From what I can see, the lenders lowered their standards, via government-mandated action or via their own volition. Add to that stupid people buying more house than they could afford and...

What exactly should Bush and congress have done? Passed law to raise lending standards? Mandated that 20% down be required?

Donger

12-04-2009, 12:44 PM

The problem is CRA had nothing to do with the housing bubble. It's just a way for Republicans to deflect blame from the fact that all of Bush's regulatory appointments failed to do their jobs.

Nothing? Zero?

KC native

12-04-2009, 12:49 PM

I wouldn't argue that the CRA was entirely responsible for the housing crisis, but I can't imagine anyone stating that it had nothing to do with it. From what I can see, the lenders lowered their standards, via government-mandated action or via their own volition. Add to that stupid people buying more house than they could afford and...

What exactly should Bush and congress have done? Passed law to raise lending standards? Mandated that 20% down be required?

Do I really have to post the analysis that completely blows this out of the water again?

CRA has no hard regulation and no lending guidelines. CRA DOESN'T REQUIRE ANY INSTITUTION TO MAKE A LOAN. It only prevents institutions from opening branches in areas and taking deposits but refusing to lend in that same area. CRA requires that the banks make an effort to lend. It didn't affect underwriting or credit worthiness.

The banks and mortgage lenders lowered their lending standards because they knew they could sell off the loans and not have to worry about default because once they were sold they were gone. This securitization was fueled by leverage and greed so the banks and mortgage lenders eager to earn more money lowered their standards to give everyone loans that they could.

KC native

12-04-2009, 12:49 PM

Nothing? Zero?

Nothing. Most of the mortgage loans that went/are going bad were made by lenders that weren't even subject to CRA.

Federal Reserve Director on the CRA
Email this post Print this post
By Barry Ritholtz - October 4th, 2008, 2:00PM

From the Federal Reserve:

"Neither the CRA nor its implementing regulation gives specific criteria for rating the performance of depository institutions. Rather, the law indicates that the evaluation process should accommodate an institution’s individual circumstances. Nor does the law require institutions to make high-risk loans that jeopardize their safety. To the contrary, the law makes it clear that an institution’s CRA activities should be undertaken in a safe and sound manner." (emphasis added)

What about mergers or acquisitions — did the CRA get in the way of that?

"Since 1988, there have been more than 13,500 applications for the formation, acquisition, or merger of bank holding companies or state-member banks reviewed by the Federal Reserve Board. Over this time, twenty-five applications have been denied, with eight of those failing to obtain Board approval involving unsatisfactory consumer protection or community reinvestment issues."

Wow, just 8 out of 13,500. That’s less than one tenth of 1%.

What about the methods of forcing compliance?

"The CRA is one of several laws enacted to ensure that consumers and communities have access to financial services and products regardless of location or demographics. Congress sought to achieve that goal not by imposing rigid, prescriptive rules but by charging regulators to use flexible standards that could change, as needed, over time."

Gee, this doesn’t sound too onerous; What was all the brouhaha about?

"The debate surrounding the passage of the CRA was contentious, with critics charging that the law would distort credit markets, create unnecessary regulatory burden, lead to unsound lending, and cause the governmental agencies charged with implementing the law to allocate credit. Partly in response to these concerns, the act adopted by Congress included little prescriptive detail."

What are the requirements of the CRA?

The CRA simply requires the Federal Reserve and the other federal financial supervisory agencies:

• to encourage federally insured depository institutions to help meet the credit needs of their entire communities, including low- and moderate-income areas, consistent with safe and sound operations;
• to assess their records of performance under the CRA during examinations; and
• to take those CRA records into account when evaluating proposals for expansion.

Hey, that sounds pretty flexible. What sort of discretion exists in applying the CRA:

The law gives the agencies considerable discretion and flexibility to fashion programs and procedures to carry out the purposes of the law, to issue implementing regulations that include measures of performance, and to modify those regulations in response to changing markets. This flexibility has contributed to CRA’s relevance and adaptability through times of rapid economic and financial change, and widely differing economic circumstances among neighborhoods.

All quotes are come from the testimony of Sandra F. Braunstein, Director, Division of Consumer and Community Affairs of the Board of Governors of the Federal Reserve System, before the Committee on Financial Services, or from the Federal Reserve website.

>

Source:
The Community Reinvestment Act
Sandra F. Braunstein, Director, Division of Consumer and Community Affairs
Before the Committee on Financial Services, U.S. House of Representatives
February 13, 2008
http://www.federalreserve.gov/newsevents/testimony/braunstein20080213a.htm

See also:
The Community Reinvestment Act: Its Evolution and New Challenges
Chairman Ben S. Bernanke
Community Affairs Research Conference, Washington, D.C. March 30, 2007
http://www.federalreserve.gov/newsevents/speech/Bernanke20070330a.htm

Howard Husock has an exercise in cognitive dissonance in today’s NYT Op-Ed pages titled Housing Goals We Can’t Afford, and it begins:

“The national wave of home foreclosures, many concentrated in lower-income and minority neighborhoods, has created a strong temptation to find the villains responsible.”

What can you say about an Op-Ed whose very first sentence is a giant pile of steaming bullshit? That statement is demonstrably false. As the prior post on foreclosures shows, the concentration is mostly middle class and upper middle class white suburban neighborhoods.

California leads the nation in foreclosures. The state’s foreclosure activity was up 51% from a year ago. These are not CRA communities, they are what were hoped to be surburban bedroom communities east of the major cities (San Diego and L.A.)

Next up is Florida; The state’s foreclosure activity was still up 68 percent from November 2007. The enormous overbuilding of Condos, and not CRA, is to blame. These weren’t inner city loans to minorities, as Dan Gross pointed out, they were “WCI Communities — builder of highly amenitized condos in Florida (no subprime purchasers welcome there)” WCI filed for bankruptcy in August. “Very few of the tens of thousands of now-surplus condominiums in Miami were conceived to be marketed to subprime borrowers, or minorities—unless you count rich Venezuelans and Colombians as minorities.”

~~~

Let’s put some context around what the CRA is and isn’t.

In the 1960s and 70s, banks would redline neighborhoods. They would literally put a map on a wall, and with a red magic marker, draw a redline enveloping certain neighborhoods. If you lived within the redlined areas, regardless of your income, credit score, assets, debt servicing ability, if you were in the redlined area you could not qualify for a mortgage.

Although Redlining was made illegal by the Fair Housing Act of 1968, the practice still surreptitiously continued. The Community Reinvestment Act of 1977 was the next attempt to stop redlining. There were two main aspects of the CRA: First, it required banks to apply the same lending criteria in all communities. Credit Score, Loan-to-value, percentage of monthly take home, etc. had to be the same across different areas.

Second, the Community Reinvestment Act required banks to make good faith attempts to loan the money back to its own depositors. If you open up a branch in Harlem, you cannot suck up all the local business and residents’ cash, and then turn around and only lend it out to Tribeca condo buyers. You must make a fair attempt to loan the money locally. Banks have no obligation to open branches in Harlem, but if they did, they are required to at least try to lend the locals back their own money.

Note that there are no quotas, minimums or mandates. This is a very soft rating system.

~~~

The rest of Husock’s article is filled with the usual dissembling and half-truths. He mentions “in 1995 the Clinton administration added tough new regulations,” but omits any mentions that the Bush administration substantially watering down the act in 2004.

The only testimony adduced from the banking industry in the Op-Ed was“a compliance officer for a New Jersey bank wrote in a letter last month to American Banker.” That’s your inside proof? Meanwhile, since Bear Stearns collapsed in March, there has been a veritable parade of bankers, mortgage originators, lenders, fund managers, and investment banks CEOs all testifying in Washington D.C. about the causes of the crisis. By some strange coincidence, not a single one blamed the CRA (Dick Fuld, CEO of Lehman Brothers was even asked about it). Not a one.

And of course, vast numbers of sub-prime mortgages were written by non-CRA banks. Indeed, none of the 300+ mortgage originators that imploded were depository banks covered by the CRA.

This is a an intellectually silly argument from other perspectives also. Why was there no credit/housing meltdown from 1977 to 2005? Why did 30 other countries, none of which have are covered by the CRA, have a remarkably similar housing boom and bust to the USA? Husock’s arguments not only fail legally and factually, they also fail in terms of time and space . . .

Nothing. Most of the mortgage loans that went/are going bad were made by lenders that weren't even subject to CRA.

You don't think that sub-prime lending had anything to do with the housing crisis>

KC native

12-04-2009, 12:53 PM

You don't think that sub-prime lending had anything to do with the housing crisis>

Subprime lending isn't covered by CRA.

jjjayb

12-04-2009, 12:54 PM

Exactly how much power did he have in 2005 to stop Republicans from preventing the housing bubble from expanding?

Hm? What major pieces of Republican legislation did he stop dead in its tracks?

Or is Barney Frank the most powerful congressperson ever?

C'mon, man. You just admitted the truth, that the Republican Party should be held responsible for its complete lack of fiscal discipline. Now you're trying to pin the housing bubble on Barney Frank.

2003- Bill S. 1508 - Did not have enough democrat support to pass cloture.
2005 Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190 did not have enough support of democrats to pass Cloture. Bawney couldn't have stopped these bills alone, but with the rest of his democrat buddies he could.

Of course, this video is from Fox news so it has no credibility at all, but Bawney makes a great cameo:

Some legal and financial experts note that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA. In the February 2008 House hearing, law professor Michael S. Barr, a Treasury Department official under President Clinton, stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made "perhaps one in four" sub-prime loans, and that "the worst and most widespread abuses occurred in the institutions with the least federal oversight".

wild1

12-04-2009, 01:08 PM

Show me one major piece of Republican legislation that was passed that was intended to fight the housing bubble, and we'll talk.

You were standing outside the bank as the gunman was knocking the place over and you didn't try to take him down, therefore, you're just as bad as he is.

KC native

12-04-2009, 01:56 PM

So this guy is wrong?

Some legal and financial experts note that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA. In the February 2008 House hearing, law professor Michael S. Barr, a Treasury Department official under President Clinton, stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made "perhaps one in four" sub-prime loans, and that "the worst and most widespread abuses occurred in the institutions with the least federal oversight".

Sorry I wasn't clear. I was referring to sub prime lenders and not the banks. My point remains valid. CRA was not responsible for the housing bubble.

Donger

12-04-2009, 01:59 PM

Sorry I wasn't clear. I was referring to sub prime lenders and not the banks. My point remains valid. CRA was not responsible for the housing bubble.

You wrote: "The problem is CRA had nothing to do with the housing bubble."

Nothing. Zero.

Want to revisit that?

KC native

12-04-2009, 02:05 PM

You wrote: "The problem is CRA had nothing to do with the housing bubble."

Barr noted that institutions fully regulated by CRA made "perhaps one in four" sub-prime loans

KC native

12-04-2009, 02:09 PM

Barr noted that institutions fully regulated by CRA made "perhaps one in four" sub-prime loans

They weren't required to make those loans. They made them because they thought they would be profitable.

Donger

12-04-2009, 02:12 PM

They weren't required to make those loans. They made them because they thought they would be profitable.

LMAO

CRA clearly did have something to do with the housing crisis.

KC native

12-04-2009, 02:18 PM

LMAO

CRA clearly did have something to do with the housing crisis.

How so? How is a law that doesn't require loans to be made or doesn't require that low/lower underwriting standards be set responsible for the housing bubble in anyway?

Donger

12-04-2009, 02:44 PM

How so? How is a law that doesn't require loans to be made or doesn't require that low/lower underwriting standards be set responsible for the housing bubble in anyway?

institutions fully regulated by CRA made "perhaps one in four" sub-prime loans

KC native

12-04-2009, 02:57 PM

institutions fully regulated by CRA made "perhaps one in four" sub-prime loans

Are you having reading problems?

The CRA didn't require them to make those loans. The banks made those loans on their own volition. So, how does a law that doesn't require a bank to make a loan responsible for a loan the bank CHOSE to make?

HonestChieffan

12-04-2009, 03:10 PM

CRA required it but he wont ever understand the regs. He will just go off on another little silly rant.

KC native

12-04-2009, 03:13 PM

CRA required it but he wont ever understand the regs. He will just go off on another little silly rant.

Really? Well the burden of proof is on you. Please cite one section of the law that says they were required to make these loans.

I know you can't and won't cite them because you are a good for nothing idiot but humor us anyways.

Donger

12-04-2009, 03:14 PM

Are you having reading problems?

The CRA didn't require them to make those loans. The banks made those loans on their own volition. So, how does a law that doesn't require a bank to make a loan responsible for a loan the bank CHOSE to make?

And you don't think that CRA encouraged such lending? Again, I'm not arguing that CRA 'required' those loans. I'm taking issue with your assertion that CRA had nothing to do with the housing crisis.

KC native

12-04-2009, 03:17 PM

And you don't think that CRA encouraged such lending? Again, I'm not arguing that CRA 'required' those loans. I'm taking issue with your assertion that CRA had nothing to do with the housing crisis.

No it did not encourage such lending. How does a law that had been on the books for 30 years all of a sudden encourage subprime loans in 2003-2005?

Donger

12-04-2009, 03:22 PM

No it did not encourage such lending. How does a law that had been on the books for 30 years all of a sudden encourage subprime loans in 2003-2005?

During a 2008 House Committee on Oversight and Government Reform hearing on the role of Fannie Mae and Freddie Mac in the financial crisis, including in relation to the Community Reinvestment Act, asked if the CRA provided the “fuel” for increasing subprime loans, former Fannie Mae CEO Franklin Raines said it might have been a catalyst encouraging bad behavior, but it was difficult to know. Raines also cited information that only a small percentage of risky loans originated as a result of the CRA. Bob McTeer, president of the Dallas Federal Reserve Bank from 1991 to 2004, said “There was a lot of pressure from Congress and generally everywhere to make homeownership affordable for poor and low-income people. Some mortgages were made that would not have ordinarily been made.” He also said “When a bank made a decision to purchase mortgaged-backed securities, they would somehow determine if some of them were in zip codes covered by the CRA, and therefore they could get CRA credit

Donger

12-04-2009, 03:25 PM

CRA required it but he wont ever understand the regs. He will just go off on another little silly rant.

I guess what I'm trying to figure out is whether or not there was some reward for institutions to make loans that met the goal of the CRA or not. I was just reading about CRA "credits" whatever that means. Also, was/is there some punishment for not?

Donger

12-04-2009, 03:36 PM

http://www.occ.treas.gov/crainfo.htm

This is interesting. Sounds like banks could be punished if their CRA 'score' wasn't good enough. I'm sure that that fact didn't encourage some banks to make questionable loans, however:

Community Reinvestment Act Information
The Act (CRA)

The CRA was enacted in 1977 to prevent redlining and to encourage banks and thrifts to help meet the credit needs of all segments of their communities, including low- and moderate-income neighborhoods. It extends and clarifies the longstanding expectation that banks will serve the convenience and needs of their local communities. The CRA and its implementing regulations require federal financial institution regulators to assess the record of each bank and thrift in helping to fulfill their obligations to the community and to consider that record in evaluating applications for charters or for approval of bank mergers, acquisitions, and branch openings. The federal financial institution regulators are: Office of the Comptroller of the Currency; Board of Governors of the Federal Reserve System; Federal Deposit Insurance Corporation; and Office of Thrift Supervision.

The law provides a framework for depository institutions and community organizations to work together to promote the availability of credit and other banking services to underserved communities. Under its impetus, banks and thrifts have opened new branches, provided expanded services, adopted more flexible credit underwriting standards, and made substantial commitments to state and local governments or community development organizations to increase lending to underserved segments of local economies and populations.

The CRA’s implementing regulation (12 CFR 25, et seq.) requires the OCC to assess a national bank’s record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with safe and sound operations. It also mandates that the agency consider that record in its evaluation of a bank’s application for new branches or relocation of an existing branch, bank mergers and consolidations, and other corporate activities. In general, the OCC conducts a CRA examination of a national bank every three years. However, the Gramm-Leach-Bliley Act mandates an extended examination cycle for smaller banks. CRA examinations for banks with an overall CRA rating of outstanding and aggregate assets of $250 million or less can be started no sooner than 60 months after the most recent CRA examination. Similarly, CRA examinations for banks with an overall CRA rating of satisfactory and aggregate assets of $250 million or less can be started no sooner than 48 months after the most recent CRA examination. Banks may be removed from this extended CRA examination cycle for reasonable cause or in connection with an application for a depository facility. The OCC publishes an advance notice of scheduled CRA examinations quarterly. A written performance evaluation of the bank’s CRA activities, including a CRA rating, is prepared at the end of each CRA examination and made available to the general public. The OCC encourages community and civic organizations, government, and other members of the public to express their views about a bank’s CRA performance to the bank and the OCC at the earliest possible time. This allows the bank to address any concerns and the OCC to take the public’s views into account in evaluating the bank’s CRA record and reaching conclusions about its performance ratings. If those comments are sent to the OCC, the OCC will also consider them when reviewing applications covered by the CRA.

KC native

12-04-2009, 03:41 PM

During a 2008 House Committee on Oversight and Government Reform hearing on the role of Fannie Mae and Freddie Mac in the financial crisis, including in relation to the Community Reinvestment Act, asked if the CRA provided the “fuel” for increasing subprime loans, former Fannie Mae CEO Franklin Raines said it might have been a catalyst encouraging bad behavior, but it was difficult to know. Raines also cited information that only a small percentage of risky loans originated as a result of the CRA. Bob McTeer, president of the Dallas Federal Reserve Bank from 1991 to 2004, said “There was a lot of pressure from Congress and generally everywhere to make homeownership affordable for poor and low-income people. Some mortgages were made that would not have ordinarily been made.” He also said “When a bank made a decision to purchase mortgaged-backed securities, they would somehow determine if some of them were in zip codes covered by the CRA, and therefore they could get CRA credit

First bolded statement:

Might have been a catalyst? You realize who you are quoting right?

Second bolded statement:

Again, no proof and more fuzzy conjecture from a fed official trying to shift blame after the fact. You do realize that there are other fed directors who disagree with him right?

As I was typing this I figured out where your source material was coming from I really like how you took that off of wiki but left off all the other relevant parts. Here it is in full so others can see how you're trying to play the role disHonest usually does.

Some economists, politicians and other commentators have charged that the CRA contributed in part to the 2008 financial crisis by encouraging banks to make unsafe loans. Others however, including the economists from the Federal Reserve and the FDIC, dispute this contention. The Federal Reserve and the FDIC holds that empirical research has not validated any relationship between the CRA and the 2008 financial crisis.[98][99]

Economist Stan Liebowitz wrote in the New York Post that a strengthening of the CRA in the 1990s encouraged a loosening of lending standards throughout the banking industry. He also charges the Federal Reserve with ignoring the negative impact of the CRA.[93] In a commentary for CNN, Congressman Ron Paul, who serves on the United States House Committee on Financial Services, charged the CRA with "forcing banks to lend to people who normally would be rejected as bad credit risks."[100] In a Wall Street Journal opinion piece, Austrian school economist Russell Roberts wrote that the CRA subsidized low-income housing by pressuring banks to serve poor borrowers and poor regions of the country.[101] Jeffrey A. Miron, a senior lecturer in economics at Harvard University, in an opinion piece for CNN, calls for “getting rid” of Fannie Mae and Freddie Mac, as well as policies like the Community Reinvestment Act that “pressure banks into subprime lending.”[102]

However, others dispute the involvement of the CRA in the subprime crisis. According to San Francisco Federal Reserve Bank Governor Randall Kroszner, the claim that "the law pushed banking institutions to undertake high-risk mortgage lending" was contrary to their experience, and that no empirical evidence had been presented to support the claim.[98] In a Bank for International Settlements (BIS) working paper, economist Luci Ellis concluded that "there is no evidence that the Community Reinvestment Act was responsible for encouraging the subprime lending boom and subsequent housing bust," relying partly on evidence that the housing bust has been a largely exurban event.[103] Others have also concluded that the CRA did not contribute to the financial crisis, for example, FDIC Chairman Sheila Bair,[99] Comptroller of the Currency John C. Dugan,[104] Tim Westrich of the Center for American Progress,[105] Robert Gordon of the American Prospect,[106] Ellen Seidman of the New America Foundation,[107] Daniel Gross of Slate,[108] and Aaron Pressman from BusinessWeek.[109]

Some legal and financial experts note that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA. In the February 2008 House hearing, law professor Michael S. Barr, a Treasury Department official under President Clinton,[65][110] stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made "perhaps one in four" sub-prime loans, and that "the worst and most widespread abuses occurred in the institutions with the least federal oversight".[111] According to Janet L. Yellen, President of the Federal Reserve Bank of San Francisco, independent mortgage companies made risky "high-priced loans" at more than twice the rate of the banks and thrifts; most CRA loans were responsibly made, and were not the higher-priced loans that have contributed to the current crisis.[112] A 2008 study by Traiger & Hinckley LLP, a law firm that counsels financial institutions on CRA compliance, found that CRA regulated institutions were less likely to make subprime loans, and when they did the interest rates were lower. CRA banks were also half as likely to resell the loans.[113] Emre Ergungor of the Federal Reserve Bank of Cleveland found that there was no statistical difference in foreclosure rates between regulated and less-regulated banks, although a local bank presence resulted in fewer foreclosures.[114]

During a 2008 House Committee on Oversight and Government Reform hearing on the role of Fannie Mae and Freddie Mac in the financial crisis, including in relation to the Community Reinvestment Act, asked if the CRA provided the “fuel” for increasing subprime loans, former Fannie Mae CEO Franklin Raines said it might have been a catalyst encouraging bad behavior, but it was difficult to know. Raines also cited information that only a small percentage of risky loans originated as a result of the CRA. Bob McTeer, president of the Dallas Federal Reserve Bank from 1991 to 2004, said “There was a lot of pressure from Congress and generally everywhere to make homeownership affordable for poor and low-income people. Some mortgages were made that would not have ordinarily been made.” He also said “When a bank made a decision to purchase mortgaged-backed securities, they would somehow determine if some of them were in zip codes covered by the CRA, and therefore they could get CRA credit.”[115][116]

KC native

12-04-2009, 03:43 PM

http://www.occ.treas.gov/crainfo.htm

This is interesting. Sounds like banks could be punished if their CRA 'score' wasn't good enough. I'm sure that that fact didn't encourage some banks to make questionable loans, however:

Community Reinvestment Act Information
The Act (CRA)

The CRA was enacted in 1977 to prevent redlining and to encourage banks and thrifts to help meet the credit needs of all segments of their communities, including low- and moderate-income neighborhoods. It extends and clarifies the longstanding expectation that banks will serve the convenience and needs of their local communities. The CRA and its implementing regulations require federal financial institution regulators to assess the record of each bank and thrift in helping to fulfill their obligations to the community and to consider that record in evaluating applications for charters or for approval of bank mergers, acquisitions, and branch openings. The federal financial institution regulators are: Office of the Comptroller of the Currency; Board of Governors of the Federal Reserve System; Federal Deposit Insurance Corporation; and Office of Thrift Supervision.

The law provides a framework for depository institutions and community organizations to work together to promote the availability of credit and other banking services to underserved communities. Under its impetus, banks and thrifts have opened new branches, provided expanded services, adopted more flexible credit underwriting standards, and made substantial commitments to state and local governments or community development organizations to increase lending to underserved segments of local economies and populations.

The CRA’s implementing regulation (12 CFR 25, et seq.) requires the OCC to assess a national bank’s record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with safe and sound operations. It also mandates that the agency consider that record in its evaluation of a bank’s application for new branches or relocation of an existing branch, bank mergers and consolidations, and other corporate activities. In general, the OCC conducts a CRA examination of a national bank every three years. However, the Gramm-Leach-Bliley Act mandates an extended examination cycle for smaller banks. CRA examinations for banks with an overall CRA rating of outstanding and aggregate assets of $250 million or less can be started no sooner than 60 months after the most recent CRA examination. Similarly, CRA examinations for banks with an overall CRA rating of satisfactory and aggregate assets of $250 million or less can be started no sooner than 48 months after the most recent CRA examination. Banks may be removed from this extended CRA examination cycle for reasonable cause or in connection with an application for a depository facility. The OCC publishes an advance notice of scheduled CRA examinations quarterly. A written performance evaluation of the bank’s CRA activities, including a CRA rating, is prepared at the end of each CRA examination and made available to the general public. The OCC encourages community and civic organizations, government, and other members of the public to express their views about a bank’s CRA performance to the bank and the OCC at the earliest possible time. This allows the bank to address any concerns and the OCC to take the public’s views into account in evaluating the bank’s CRA record and reaching conclusions about its performance ratings. If those comments are sent to the OCC, the OCC will also consider them when reviewing applications covered by the CRA.

Did you not read my earlier post? This was covered. The CRA is a soft rating system meaning there are no guidelines.

Here I'll just quote it again since you're in a disHonest type of mood.

Federal Reserve Director on the CRA
Email this post Print this post
By Barry Ritholtz - October 4th, 2008, 2:00PM

From the Federal Reserve:

"Neither the CRA nor its implementing regulation gives specific criteria for rating the performance of depository institutions. Rather, the law indicates that the evaluation process should accommodate an institution’s individual circumstances. Nor does the law require institutions to make high-risk loans that jeopardize their safety. To the contrary, the law makes it clear that an institution’s CRA activities should be undertaken in a safe and sound manner." (emphasis added)

What about mergers or acquisitions — did the CRA get in the way of that?

"Since 1988, there have been more than 13,500 applications for the formation, acquisition, or merger of bank holding companies or state-member banks reviewed by the Federal Reserve Board. Over this time, twenty-five applications have been denied, with eight of those failing to obtain Board approval involving unsatisfactory consumer protection or community reinvestment issues."

Wow, just 8 out of 13,500. That’s less than one tenth of 1%.

What about the methods of forcing compliance?

"The CRA is one of several laws enacted to ensure that consumers and communities have access to financial services and products regardless of location or demographics. Congress sought to achieve that goal not by imposing rigid, prescriptive rules but by charging regulators to use flexible standards that could change, as needed, over time."

Gee, this doesn’t sound too onerous; What was all the brouhaha about?

"The debate surrounding the passage of the CRA was contentious, with critics charging that the law would distort credit markets, create unnecessary regulatory burden, lead to unsound lending, and cause the governmental agencies charged with implementing the law to allocate credit. Partly in response to these concerns, the act adopted by Congress included little prescriptive detail."

What are the requirements of the CRA?

The CRA simply requires the Federal Reserve and the other federal financial supervisory agencies:

• to encourage federally insured depository institutions to help meet the credit needs of their entire communities, including low- and moderate-income areas, consistent with safe and sound operations;
• to assess their records of performance under the CRA during examinations; and
• to take those CRA records into account when evaluating proposals for expansion.

Hey, that sounds pretty flexible. What sort of discretion exists in applying the CRA:

The law gives the agencies considerable discretion and flexibility to fashion programs and procedures to carry out the purposes of the law, to issue implementing regulations that include measures of performance, and to modify those regulations in response to changing markets. This flexibility has contributed to CRA’s relevance and adaptability through times of rapid economic and financial change, and widely differing economic circumstances among neighborhoods.

All quotes are come from the testimony of Sandra F. Braunstein, Director, Division of Consumer and Community Affairs of the Board of Governors of the Federal Reserve System, before the Committee on Financial Services, or from the Federal Reserve website.

>

Source:
The Community Reinvestment Act
Sandra F. Braunstein, Director, Division of Consumer and Community Affairs
Before the Committee on Financial Services, U.S. House of Representatives
February 13, 2008
http://www.federalreserve.gov/newsevents/testimony/braunstein20080213a.htm

See also:
The Community Reinvestment Act: Its Evolution and New Challenges
Chairman Ben S. Bernanke
Community Affairs Research Conference, Washington, D.C. March 30, 2007
http://www.federalreserve.gov/newsevents/speech/Bernanke20070330a.htm

Again, no proof and more fuzzy conjecture from a fed official trying to shift blame after the fact. You do realize that there are other fed directors who disagree with him right?

As I was typing this I figured out where your source material was coming from I really like how you took that off of wiki but left off all the other relevant parts. Here it is in full so others can see how you're trying to play the role disHonest usually does.

Again, I'm not claiming that CRA was fully responsible for the housing crisis. You, on the other hand, are arguing that it had NOTHING to do with it. That just seems comical, based on what I've read so far.

KC native

12-04-2009, 03:49 PM

Again, I'm not claiming that CRA was fully responsible for the housing crisis. You, on the other hand, are arguing that it had NOTHING to do with it. That just seems comical, based on what I've read so far.

It only seems comical to someone who can't look at things objectively. You're trying to use people's testimony (raines and McTeer's) whose reputations were both tarnished due to missing and playing a part in this recent crisis and both had their own ass to cover and acting like it's expert opinion.

Donger

12-04-2009, 03:55 PM

Interesting, too:

The research focused on two basic questions. First, we asked what share of originations for subprime loans is related to the CRA. The potential role of the CRA in the subprime crisis could either be large or small, depending on the answer to this question. We found that the loans that are the focus of the CRA represent a very small portion of the subprime lending market, casting considerable doubt on the potential contribution that the law could have made to the subprime mortgage crisis.

http://www.federalreserve.gov/newsevents/speech/kroszner20081203a.htm

Still zero, kc native?

KC native

12-04-2009, 03:57 PM

Interesting, too:

The research focused on two basic questions. First, we asked what share of originations for subprime loans is related to the CRA. The potential role of the CRA in the subprime crisis could either be large or small, depending on the answer to this question. We found that the loans that are the focus of the CRA represent a very small portion of the subprime lending market, casting considerable doubt on the potential contribution that the law could have made to the subprime mortgage crisis.

http://www.federalreserve.gov/newsevents/speech/kroszner20081203a.htm

Still zero, kc native?

Yup, zero.

KC native

12-04-2009, 04:00 PM

Interesting, too:

The research focused on two basic questions. First, we asked what share of originations for subprime loans is related to the CRA. The potential role of the CRA in the subprime crisis could either be large or small, depending on the answer to this question. We found that the loans that are the focus of the CRA represent a very small portion of the subprime lending market, casting considerable doubt on the potential contribution that the law could have made to the subprime mortgage crisis.

http://www.federalreserve.gov/newsevents/speech/kroszner20081203a.htm

Still zero, kc native?

Wow, you really are being a cawksucker today.

Right below that tells you all you need to know.

Second, we asked how CRA-related subprime loans performed relative to other loans. Once again, the potential role of the CRA could be large or small, depending on the answer to this question. We found that delinquency rates were high in all neighborhood income groups, and that CRA-related subprime loans performed in a comparable manner to other subprime loans; as such, differences in performance between CRA-related subprime lending and other subprime lending cannot lie at the root of recent market turmoil.

Donger

12-04-2009, 04:02 PM

Yup, zero.

Let me get this straight: for you, very small equals zero?

Donger

12-04-2009, 04:03 PM

Wow, you really are being a cawksucker today.

Right below that tells you all you need to know.

Good lord, that just proves me correct. CRA did NOT have zero effect on the housing crisis. It did, in fact, have something to do with it.

KC native

12-04-2009, 04:03 PM

Perhaps you should actually read the material before you post it.

In analyzing the available data, we focused on two distinct metrics: loan origination activity and loan performance. With respect to the first question concerning loan originations, we wanted to know which types of lending institutions made higher-priced loans, to whom those loans were made, and in what types of neighborhoods the loans were extended.5 This analysis allowed us to determine what fraction of subprime lending could be related to the CRA.

Our analysis of the loan data found that about 60 percent of higher-priced loan originations went to middle- or higher-income borrowers or neighborhoods. Such borrowers are not the populations targeted by the CRA. In addition, more than 20 percent of the higher-priced loans were extended to lower-income borrowers or borrowers in lower-income areas by independent nonbank institutions--that is, institutions not covered by the CRA.6

Putting together these facts provides a striking result: Only 6 percent of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas, the local geographies that are the primary focus for CRA evaluation purposes. This result undermines the assertion by critics of the potential for a substantial role for the CRA in the subprime crisis. In other words, the very small share of all higher-priced loan originations that can reasonably be attributed to the CRA makes it hard to imagine how this law could have contributed in any meaningful way to the current subprime crisis.

KC native

12-04-2009, 04:04 PM

Conclusions
Our findings are important because neighborhoods and communities affected by the economic downturn will require the active participation of financial institutions. Considering the situation today, many neighborhoods that are not currently the focus of the CRA are also experiencing great difficulties. Our recent review of foreclosure data suggested that many middle-income areas currently have elevated rates of foreclosure filings and could face the prospect of falling into low-to-moderate income status. In fact, 13 percent of the middle-income Zip codes have had foreclosure-rate filings that are above the overall rate for lower-income areas.

Helping to stabilize such areas not only benefits families in these areas but also provides spillover benefits to adjacent lower-income areas that are the traditional target of the CRA. Recognizing this, the Congress recently underscored the need for states and localities to undertake a comprehensive approach to stabilizing neighborhoods hard-hit by foreclosures through the enactment of the new Neighborhood Stabilization Program (NSP). The NSP permits targeting of federal funds to benefit families up to 120 percent of area median income in those areas experiencing rising foreclosures and falling home values.

In conclusion, I believe the CRA is an important model for designing incentives that motivate private-sector involvement to help meet community needs. The CRA has, in fact, been helpful in alleviating the financial isolation of many areas of concentrated poverty, but as our report illustrates, there is much more that could be done in these communities. Contrary to the assertions of critics, the evidence does not support the view that the CRA contributed in any substantial way to the crisis in the subprime mortgage market. Today's discussion is an important first step in the process of identifying other initiatives and areas of cooperation between government and the private sector that will effectively address the continuing challenge of poverty in the United States.

KC native

12-04-2009, 04:05 PM

Good lord, that just proves me correct. CRA did NOT have zero effect on the housing crisis. It did, in fact, have something to do with it.

:shake: If there is no difference in CRA loans and non-CRA loans in terms of performance, how is the CRA responsible in anyway?

patteeu

12-04-2009, 04:05 PM

I'm already on record saying that I would not support a second stimulus until we can see the results somewhere after we've handed out 50-75% of this stimulus' funds.

You were already on record being for the war in Afghanistan when Bush was emphasizing Iraq and thinking deep thoughts about it in the early days of the Obama administration before you did exactly what I predicted liberals would do after they won the WH,... bail out.

I'm predicting here that you'll find a way to support a second stimulus no matter what intellectual obstacles you have to overcome.

Donger

12-04-2009, 04:05 PM

Perhaps you should actually read the material before you post it.

Or perhaps you should:

This result undermines the assertion by critics of the potential for a substantial role for the CRA in the subprime crisis. In other words, the very small share of all higher-priced loan originations that can reasonably be attributed to the CRA makes it hard to imagine how this law could have contributed in any meaningful way to the current subprime crisis.

Do you know what zero means? Perhaps that's where we've diverged.

KC native

12-04-2009, 04:06 PM

Or perhaps you should:

This result undermines the assertion by critics of the potential for a substantial role for the CRA in the subprime crisis. In other words, the very small share of all higher-priced loan originations that can reasonably be attributed to the CRA makes it hard to imagine how this law could have contributed in any meaningful way to the current subprime crisis.

Do you know what zero means? Perhaps that's where we've diverged.

Read my other posts.

Donger

12-04-2009, 04:07 PM

:shake: If there is no difference in CRA loans and non-CRA loans in terms of performance, how is the CRA responsible in anyway?

Would those loans have been granted if it weren't for CRA?

HonestChieffan

12-04-2009, 04:08 PM

Read my other posts.

Why? Its all the same nonsence you spew ad nauseum.

Donger

12-04-2009, 04:08 PM

Read my other posts.

I have read your other posts, and they all tell me the same thing: you either don't know what nothing/zero means, or you made a mistake when you wrote that CRA had nothing/zero to do with the housing crisis.

KC native

12-04-2009, 04:09 PM

Would those loans have been granted if it weren't for CRA?

Yes. Those banks would have still made the loans. The banks made those loans because THEY THOUGHT THEY COULD MAKE MONEY ON THEM NOT BECAUSE THEY WERE REQUIRED TO.

Donger

12-04-2009, 04:09 PM

Yes. Those banks would have still made the loans. The banks made those loans because THEY THOUGHT THEY COULD MAKE MONEY ON THEM NOT BECAUSE THEY WERE REQUIRED TO.

Really? Then why was CRA needed?

patteeu

12-04-2009, 04:10 PM

Hey, even if Democrats get the blame for creating the CRA, so be it.

But Republicans had this bubble ready to burst under their noses and nothing happened.

Just like healthcare. Medicare. Social security. Two deficit-financed wars.

Fiscal responsibility within the Republican Party is a laughing matter. Their lectures mean nothing to me for the next four years.

You must have amnesia. It was democrats who controlled the Congress when the housing bubble burst and in the legislative session immediately prior to it. They were too busy trying to lose a war and win an election to focus on it though.

KC native

12-04-2009, 04:10 PM

Really? Then why was CRA needed?

Because of the banks' history of redlining neighborhoods prior to its passage.

Donger

12-04-2009, 04:12 PM

Because of the banks' history of redlining neighborhoods prior to its passage.

Right. So, the banks then played nice without any requirement to delve into territories unknown, thanks to CRA.

You agree with that, right?

dirk digler

12-04-2009, 04:14 PM

You must have amnesia. It was democrats who controlled the Congress when the housing bubble burst and in the legislative session immediately prior to it. They were too busy trying to lose a war and win an election to focus on it though.

LMAO Yeah it was the evil dems who destroyed the economy in a short 11 month period.

Did you drop acid before you made this statement?

KC native

12-04-2009, 05:40 PM

Right. So, the banks then played nice without any requirement to delve into territories unknown, thanks to CRA.

You agree with that, right?

Wow, so since your previous line of bullshit failed time to switch the subject huh?

Donger

12-04-2009, 07:35 PM

Wow, so since your previous line of bullshit failed time to switch the subject huh?

No. What's your answer? Would those banks have sought those new customers sans CRA or not?

KCWolfman

12-04-2009, 10:59 PM

The Republicans who voted against it.

I saw it on the news again today. So I will ask again - if only 20% has been spent, why are the Dems demanding another stimulus package?
Posted via Mobile Device

KCWolfman

12-04-2009, 11:00 PM

LMAO Yeah it was the evil dems who destroyed the economy in a short 11 month period.

Did you drop acid before you made this statement?

The dems have not had control for the last five years? Or did GWB have secret powers over them?

Did you eat a mushroom before making that statement?
Posted via Mobile Device

KC Dan

12-04-2009, 11:33 PM

The dems have not had control for the last five years? Or did GWB have secret powers over them?

Did you eat a mushroom before making that statement?
Posted via Mobile DeviceNo, they took control after 2006 election. Three years. GWB wanted to spend just as fast as the Dems.

KCWolfman

12-04-2009, 11:35 PM

No, they took control after 2006 election. Three years. GWB wanted to spend just as fast as the Dems.

Have no doubt, I know both were fuck ups. But to act as though the Dems had nothing to do with it is the denial of an ignorant or an extremist.
Posted via Mobile Device

KC Dan

12-04-2009, 11:40 PM

Have no doubt, I know both were **** ups. But to act as though the Dems had nothing to do with it is the denial of an ignorant or an extremist.
Posted via Mobile Device
Agreed

patteeu

12-07-2009, 08:23 AM

LMAO Yeah it was the evil dems who destroyed the economy in a short 11 month period.

Did you drop acid before you made this statement?

What I said, and I still stand by it, is that it was the dems who were in the last, best position to do something about the housing bubble before it burst, not the Republicans.

Here's an analogy that might work for you. Donald and Ronald decide to take a road trip. Donald, gets the car started and heads in the general direction of the Grand Canyon. Ronald, takes over, continues the same heading and accelerates to 60 mph. Then Donald gets back in the drivers seat, maintains speed as he approaches the edge of the canyon and drives right over the edge. You can't blame R when D was at the controls when the cliff was most apparent and when they had their last, best chance to stop or change direction.

http://www.joepaduda.com/ThelmaLouise3.jpg

BigRedChief

12-07-2009, 08:28 AM

What I said, and I still stand by it, is that it was the dems who were in the last, best position to do something about the housing bubble before it burst, not the Republicans.

Here's an analogy that might work for you. Donald and Ronald decide to take a road trip. Donald, gets the car started and heads in the general direction of the Grand Canyon. Ronald, takes over, continues the same heading and accelerates to 60 mph. Then Donald gets back in the drivers seat, maintains speed as he approaches the edge of the canyon and drives right over the edge. You can't blame R when D was at the controls when the cliff was most apparent and when they had their last, best chance to stop or change direction.

There is plenty of blame to go around on this mess on both sides of the aisle. But, the guy in charge is the guy in charge. He/she gets the balme or the praise, regardless if its warranted. If the economy turns around Obama will get the credit, it it doesn't, the blame. Thats just how it works.

patteeu

12-07-2009, 08:28 AM

No, they took control after 2006 election. Three years. GWB wanted to spend just as fast as the Dems.

With the exception of war spending (which is big, but not even in the same ballpark as discretionary spending under Obama) and a few other minor programs, this is a popular misconception. At almost every step along the path of Bush domestic spending, democrats wanted to spend more. For example, they complained that NCLB was underfunded and they wanted to spend even more on a prescription drug program than Bush did. Bush was a bad spender, but he wasn't as bad as democrats would have been if they'd have had control of both the WH and Congress. The current administration is providing further proof of this, but it was already apparent before Obama's presidency.

patteeu

12-07-2009, 08:37 AM

Despite your analogy, the buck stops where?

There is plenty of blame to go around on this mess on both sides of the aisle. But, the guy in charge is the guy in charge. He/she gets the balme or the praise, regardless if its warranted. If the economy turns around Obama will get the credit, it it doesn't, the blame. Thats just how it works.

I agree that there's plenty of blame to go around, but it's ridiculous for Direckshun (and apparently dirk) to exclusively blame Republicans for having this happen "under their noses" when democrats were in charge of one of the two branches of government that could have done something about it. Of course, you didn't have anything to say about that when you could have actually made a credible comment about shared blame.

BTW, "the guy in charge" is not in charge of the legislature. They're equals. Regardless of how you think it works, the President doesn't deserve credit or blame for the actions or inaction of a Congress controlled by the opposition. Bush rightfully gets the blame/credit for the years when he had a compliant, Republican Congress. Obama will deserve the same as long as he has the luxury of a democrat Congress.

The Mad Crapper

08-31-2010, 06:57 AM

Get ready, shithead is about to repeat more failed porkulus...

WASHINGTON (Dow Jones)--President Barack Obama on Monday said his economic team is working to identify new measures to stimulate U.S. growth as part of a "full-scale attack" to strengthen the lackluster economy.

Obama, speaking in the White House Rose Garden, said his economic team is "hard at work in identifying additional measures that could make a difference in both promoting growth and hiring in the short term, and increasing our economy's competitiveness in the long term."

http://online.wsj.com/article/BT-CO-20100830-711669.html

BucEyedPea

08-31-2010, 07:00 AM

Get ready, shithead is about to repeat more failed porkulus...

WASHINGTON (Dow Jones)--President Barack Obama on Monday said his economic team is working to identify new measures to stimulate U.S. growth as part of a "full-scale attack" to strengthen the lackluster economy.

Ohhhh Brutha! Hasn't he done enough attack....I mean DAMAGE already?

Scorch and burn policy here we come.

BucEyedPea

08-31-2010, 07:04 AM

Despite your analogy, the buck stops where?

There is plenty of blame to go around on this mess on both sides of the aisle. But, the guy in charge is the guy in charge. He/she gets the balme or the praise, regardless if its warranted. If the economy turns around Obama will get the credit, it it doesn't, the blame. Thats just how it works.

The BUCK in this case stops with Congress since all revenue bills originate there. Sure Obama can veto....but you guys still have a majority and they can override him, which isn't gonna be necessary.

Even if there is some blame on Bush and the Rs, at this point in time it's more on the Ds. Plus the Rs acted and spent like Democrats. Bush governed to the left of LBJ. Bush's Federal Reserve stimulated artificially too. That's how they took us out of the Clinton recession and paid for a undeclared war.